Financial instruments

29.

Financial instruments

Financial instruments by category

The carrying value and fair value of financial instruments as of March 31, 2026 and 2025, respectively were as follows:

As of March 31, 2026

As of March 31, 2025

Cash and cash equivalents

Trade and other receivables

Derivative financial instruments

Trade and other payables

Derivative financial instrument

Long-term borrowings

Short-term borrowings

Other liabilities and provisions

(2)

See below discussion in this Note 30

Other assets that are not financial assets (such as receivables from statutory authorities, government incentives receivable, prepaid expenses, advances paid and certain other receivables) of Rs.30,215 and Rs.27,162 as of March 31, 2026 and 2025, respectively, are not included.

Other liabilities and provisions that are not financial liabilities (such as statutory dues payable, deferred revenue, advances from customers and certain other accruals) of Rs.17,239 and Rs.18,195 as of March 31, 2026 and 2025, respectively, are not included.

Other liabilities and provisions includes amount measured at amortized cost of Rs.43,792 and Rs.34,001 as of March 31, 2026 and 2025, respectively, and contingent consideration measured at FVTPL of Rs.220 and Rs.2,916 as of March 31, 2026 and 2025, respectively.

For trade receivables, trade payables, other assets and payables maturing within one year from the reporting date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2026:

FVTPL - Financial asset

Investments in units of mutual funds

FVTPL - Financial asset - Investment in limited liability partnership firm

(2)

FVTPL - Financial asset - Investments in equity securities

FVTPL – Financial asset - Investments in others

FVTOCI - Financial asset

Investments in equity securities

Derivative financial instruments

net loss on outstanding foreign exchange forward, option, swap contracts and interest rate swap contracts

(1)

FVTPL – Financial liability

Contingent consideration

The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2025:

FVTPL - Financial asset

Investments in units of mutual funds

FVTPL - Financial asset - Investment in limited liability partnership firm

(2)

FVTPL - Financial asset - Investments in equity securities

FVTPL – Financial asset - Investments in others

FVTOCI - Financial asset

Investments in equity securities

Derivative financial instruments

net loss on outstanding foreign exchange forward, option, swap contracts and interest rate swap contracts

(1)

FVTPL – Financial liability

Contingent consideration

The Company enters into derivative financial instruments with various counterparties, principally financial institutions and banks. Derivatives which are valued using valuation techniques with market observable inputs are mainly interest rate swaps, foreign exchange forward option and swap contracts. The most frequently applied valuation techniques include forward pricing, swap models and Black-Scholes-Merton models (for option valuation), using present value calculations. The models incorporate various inputs, including foreign exchange forward rates, interest rate curves and forward rate curves.

Fair value of these instruments is determined based on an independent valuation report, which uses the net asset value method.

As of March 31, 2026 and 2025, the changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognized at fair value.

Derivative financial instruments

The Company had a derivative financial asset and derivative financial liability of Rs.155 and Rs.6,898, respectively, as of March 31, 2026, as compared to a derivative financial asset and derivative financial liability of Rs.557 and Rs.1,286, respectively, as of March 31, 2025, attributable to these derivative financial instruments.

Details of gain/(loss) recognized in respect of derivative contracts

The following table presents details in

respect

of the gain/(loss) recognized in respect of derivative contracts to hedge highly probable forecast transactions during the applicable year ended:

For the Year Ended March 31,

Net loss recognized in finance costs in respect of foreign exchange derivative contracts

Net (loss)/gain recognized in OCI in respect of hedges of highly probable forecast transactions

Net (loss)/gain reclassified from OCI and recognized as component of revenue upon occurrence of forecasted transaction

The net carrying amount of the Company’s “hedging reserve” as a component of equity before adjusting for tax impact is a loss of Rs.1,555 as of March 31, 2026, as compared to a gain of Rs.143 as of March 31, 2025.

Outstanding foreign exchange derivative contracts

The following table gives details in respect of the notional amount of outstanding foreign exchange derivative contracts as of March 31, 2026.

Category

Instrument

Currency

(1)

Cross Currency

(1)

Amounts

Buy/Sell

Hedges of recognized assets and liabilities

Forward contract

CAD

INR

CAD 1

Sell

Forward contract

U.S.$

INR

U.S.$842

Sell

Forward contract

ZAR

INR

ZAR 216

Sell

Forward contract

GBP

INR

GBP 10

Sell

Forward contract

AUD

INR

AUD 8

Sell

Forward contract

EUR

INR

EUR 12

Sell

Forward contract

U.S.$

BRL

U.S.$(10)

Buy

Forward contract

U.S.$

CLP

U.S.$(4)

Buy

Forward contract

U.S.$

COP

U.S.$(9)

Buy

Forward contract

U.S.$

KZT

U.S.$(8)

Buy

Forward contract

RUB

U.S.$

RUB 3,700

Sell

Forward contract

EUR

U.S.$

EUR (78)

Buy

Forward contract

GBP

U.S.$

GBP (31)

Buy

Forward contract

U.S.$

AUD

U.S.$(4)

Buy

Forward contract

U.S.$

RON

U.S.$(15)

Buy

Principal only swap

U.S.$

INR

U.S.$100

Sell

Hedges of highly probable forecast transactions

Forward contract

U.S.$

INR

U.S.$30

Sell

Forward contract

RUB

U.S.$

RUB 2,500

Sell

Forward contract

U.S.$

BRL

U.S.$(18)

Buy

Option contract

U.S.$

INR

U.S.$771

Sell

“AUD” means Australian dollars, “BRL” means Brazilian reals, “CAD” means Canadian dollars, “COP” means Colombian pesos, “CLP” means Chilean pesos, “DKK” means Danish Krones, “EUR” means Euros, “GBP” means U.K. pounds sterling, “INR” means Indian rupees, “KZT” means Kazakhstan tenge, “MXN” means Mexican pesos, “RON” means Romanian new leus, “RUB” means Russian roubles, “U.S.$” means United States dollars and “ZAR” means South African rands.

The table below summarizes the periods when the cash flows associated with highly probable forecast transactions that are classified as cash flow hedges are expected to occur:

Cash flows in U.S dollars

Not later than one month

Later than one month and not later than three months

Later than three months and not later than six months

Later than six months and not later than one year

Cash flows in Russian roubles

Not later than one month

Later than one month and not later than three months

Later than three months and not later than six months

Later than six months and not later than one year

Cash flows in Brazilian reals

Not later than one month

Later than one month and not later than three months

Later than three months and not later than six months

Later than six months and not later than one year